Fitch cuts American Capital

Fitch Ratings said it has downgraded the following American Capital Strategies LLC ratings: issuer default rating to B- from BB-; and senior unsecured debt to B+/RR2 (71% - 90% recovery band) from BB-.

The ratings remain on rating watch negative.

The rating downgrade underscores the company's limited financial flexibility and significant reliance on the sale of investment assets to reduce leverage, the agency said.

Given the weak economic environment, Fitch added that it recognizes that continued deterioration in ACAS investment portfolio performance is likely and will continue to pressure efforts to reduce leverage due to the recognition of further unrealized losses and lower than anticipated proceeds from asset sales.

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